General Motors Raises Adjusted Outlook as Revenue Returns to Growth
Adjusted automotive free cash flow climbed 78% to $5.03 billion.
General Motors (GM), the Detroit automaker, returned to revenue growth in the second quarter and posted faster adjusted-earnings gains as its North American business strengthened. Revenue had declined year over year in each of the previous three quarters, including a 0.9% drop in the first quarter.
Revenue rose 1.9% from a year earlier to $48.03 billion, following the first quarter's decline, and increased 10.1% sequentially. Adjusted diluted earnings rose 41.3% to $3.57 a share, accelerating from 33% growth in the prior quarter. GAAP diluted earnings fell 26% to $1.41 a share.
Adjusted EBIT increased 29.8% to $3.94 billion, extending its acceleration from 21.9% growth in the first quarter. The adjusted margin expanded 1.8 percentage points from a year earlier to 8.2%, though it narrowed from 9.7% sequentially.
North America supplied most of the improvement. GM North America adjusted EBIT rose 42.7% to $3.45 billion, adding $1.03 billion from a year earlier, as its margin expanded 2.5 percentage points to 8.6%. International adjusted EBIT declined $13 million from a year earlier, and GM Financial's adjusted pretax earnings fell $99 million to $605 million.
The underlying automotive business showed pressure beneath the adjusted gains. Automotive revenue rose 2.1% to $43.76 billion, while automotive operating income fell 39.7% to $867 million as cost of sales increased 3.6%. International revenue grew 11%, outpacing North America's 1.1% increase.
GM raised its 2026 adjusted outlook for a second time. The company now expects adjusted EBIT of $14.0 billion to $16.0 billion, adjusted automotive free cash flow of $9.5 billion to $11.5 billion and adjusted EPS of $12.00 to $14.00, lifting each range by $0.5 billion or 50 cents a share.
Its GAAP outlook moved lower as forecast adjustments climbed to $3.5 billion from $1.0 billion. GM now expects net income of $8.4 billion to $9.8 billion and diluted EPS of $8.98 to $10.98. Expected automotive operating cash flow also fell by $1.4 billion at both ends of its range, even as the adjusted free-cash-flow forecast increased.
EV strategic-realignment charges drove the widening gap between reported and adjusted results. Second-quarter special-item adjustments rose to $2.46 billion, including $2.28 billion of EV-related charges, and six-month EV-realignment adjustments reached $3.36 billion. Those costs helped push net income attributable to stockholders down 31.1% to $1.31 billion even as adjusted EBIT advanced.